Outboard Emissions Law Passed: Now for the details

Outboard Emissions Law Passed: Now for the details

At last we have emissions standards for small petrol engines up to 19kW (25Hp) which includes mowers; generators; chainsaws and all marine engines (outboards, inboards, and Jet Skis). The Bill was passed on September 11 and comes into effect 1 July 2018.

The day after the law passed the Senate the Department, OPEA and the marine sector met to start work on the details of the Rules. (These were all outlined in the January Information Paper you can read at http://tinyurl.com/updatepaper.) Six hours later Industry left with plenty of homework to do and positive signs that the Department will work closely to iron out the details.

But first, just to clear up the nonsense being spread by certain dealers: the law is NOT a ban on two strokes. It is an emissions limit for new imports starting in 2018. There are different standards for:

• ground supported machines (mowers, generators etc where only four strokes will meet the standard);
• hand held machines (chainsaws, blowers etc) have a more generous standard and we will see mostly quality two strokes and most existing four strokes survive;
• marine where four strokes and the unique Direct Injection two stroke outboards will pass.

Around half of the machines sold in Australia already meet the standards. The Rules are based on and accept the USEPA certification. We will also accept EU and Canadian certification – so it seems unlikely that many companies will need to seek Australian Certification. If any member anticipates that they will need to have their machines certified and labelled in Australia – please get in touch with us urgently so we can ensure you are not disadvantaged.

If you do not have USA or EU certified products, then gaining Australian Certification of an engine is an expensive process. First, the Rules will require the more expensive USAEPA testing standard, with 20 to 30 test points instead of just 5. That could cost in the order of $25,000 and you will need to use a recommended ILAC certified laboratory. You can use a Non-ILAC lab – but the Government certification fee goes up from $1,330 to $5,220. If you think that you may need to have an engine certified in Australia, the team working with the Department need to know asap. Please contact us via gary@blueskyalliance.com.au or associations@aigroup.com.au .

Here is a summary of the discussion:

Costs: All government programs need to comply with Australian Government cost recovery guidelines. There are two types of cost recovery charges:
• cost recovery fees—fees charged when a good, service or regulation (in certain circumstances) is provided directly to a specific individual or organisation
• cost recovery levies—charges imposed when a good, service or regulation is provided to a group of individuals or organisations (e.g. an industry sector) rather than to a specific individual or organisation. A cost recovery levy is a tax and is imposed via a separate taxation Act. It differs from general taxation as it is ‘earmarked’ to fund activities provided to the group that pays the levy.

A levy will be charged on imports after 1 July 2018. The Government explained that they need to recover $2m from across an estimated 1.3m imports. The budget needs a lot more work but it might be around $0.80 to $1.60 for a mower and perhaps $200 for a $30,000 ride on. That’s import charges: retail prices are up to importers and dealers.

Exemptions: The laws will have an option for exemptions. Military and rescue and emergency services rate a special acknowledgement. Repowering old equipment may also be granted an exemption but the advice was that this would be in very special circumstances only.

Engines for genuine competition may be eligible for an exemption. It would need to be genuine racing under a recognized body.

The proposed fee for most exemption applications is $1,470.

Exemptions for pre-production samples, which will need to be destroyed or re-exported may attract a lower fee of $390.

The Rules will also anticipate exemptions where necessary for military and national security, rescue and emergency services.

Spare Parts: Buying a non-compliant engine today is the public’s choice to make. I have one, a cheap and cheerful chain saw I rarely use. Under the ACCC laws there is an obligation for spare parts to be available for five years so importers please take note.

Loopholes: There has been a lot of chatter about importing non-compliant products via New Zealand under the Trans-Tasman Mutual Recognition Agreement (TTMRA). As it stands today high emission products imported from NZ will be illegal from July 1, 2018. The Department assured us that they are on to this and will have an exemption in place, which will close the loophole before commencement in July 2018.

What Happens Next?
Importers have a lot of work to do. Some of the clean engines we are getting now will need to change over to the US or EU equivalent – some with minor differences – but the key one is that they carry the USEPA or EU certification label.

Debating with government over the fine points of the rules should be their number one priority. Getting it wrong now will take years to fix. Usually a review is carried out every ten years.

Dealers will need to make some careful stock choices. Manufacturers will start to drop models and limit the stock of non-compliant engines. ‘Do I stock up on two strokes for a final rush or will I be stuck with stock I need to sell below cost on 30 June 2019’?

Victa produced their final two stroke mowers and promoted this limited edition last December. According to the chatter, they were slow to move.

Personally, if I were a dealer I would not lose sleep about being left with a single two stroke mower in the shop. The Department will be focused on importers of container loads of products, and won’t be after the odd left over engine.

The message is – don’t panic! If you’re a customer and are keen to get a non-compliant product before they disappear, then order one now. There may be some super bargains in May 2019 as dealers reduce stock to avoid potential fines and seizures. Expect that parts will be hard to find in a few years. Remember the laws only target new imports.

Public Consultation: Once the rough edges have been taken off the draft rules in consultation with industry, an open consultation is planned for November. Get yourself on the Product Emissions Standards mailing list if you want an invitation to be part of the process.

The future of the Industry? The future of our industry looks rosy. Although some cheap and cheerful products will continue to reach the market, we should see a growth in quality products that cost more but last years longer. The extended life of the product will be a public benefit, and the extension in servicing will support the sustainability for dealers.

Questions? Ideas? This is about the final chance to have your say, and we’re listening Please contact us via
gary@blueskyalliance.com.au or
associations@aigroup.com.au